In Maryland, each property owner is levied a property tax by the state and by their county (or city, in the case of Baltimore City). The MD State Department of Assessments and Taxation (MD SDAT) estimates the value of a property, and the county or city is responsible for billing and collecting the taxes.
Property taxes are generally used for things like public safety, sanitation, education, transportation, health services, legislative expenses, social services, recreation, and many other services extended to residents.
The total assessed value of a property is split into two sections: the land value and the property value. Every three years a property is re-assessed by MD SDAT. Baltimore City is divided into three sections, so that 1/3 of the city properties are assessed each year. In December, property owners receive an assessment notice of their assessment year which details the newly assessed value of their land and property. Every property owner has the right to appeal the notice of assessment of his or her property within 45 days of the date of the notice.
MD SDAT uses two methods or approaches to determine the assessed value of a property. To determine the value of the land, property assessors use what they call the Sales Approach. They look at the sales prices of comparable properties to determine what your land is worth. To determine the value of your dwelling, the Cost Approach is used. This method calculates what it would cost to build a similar dwelling, minus any depreciation due to the age and condition of the house. Assessors will also note the sales of similar dwellings to see if they are worth more or less than a newly constructed house.
Properties in Baltimore City are levied a Baltimore City property tax and a Maryland State property tax.
Current (July 1, 2015 to June 30, 2016) tax rates:
- Baltimore City (non-owner-occupied)*: $2.248 for every $100 of assessed property value
- Maryland State: $0.112 for every $100 of assessed property value
*In an effort to reduce the city property tax rate "20 cents by 2020," (a strategy outlined by Mayor Stephanie Rawlings-Blake’s administration in 2012) Baltimore City Council passed legislation approving the "Targeted Homeowners Property Tax Credit." This credit reduces the property taxes for owner-occupants. Each year, the board of estimates approves a new credit amount, which is then applied against the "improved value" of owner-occupied properties. (Property assessments are comprised of two parts: the "land" and the "improved value.") The city budget includes $20,900,000 for the "Targeted Homeowners Tax Credit" in Fiscal Year 2016, which runs from July 1, 2015 to June 30, 2016. In Fiscal Year 2016, the estimated average tax rate for homeowners in owner-occupied properties has been reduced by nearly 14 cents. This tax credit is on track to reduce the effective tax rate 20 cents by 2020.
There are two special Community Benefits Districts within Baltimore City. Properties within the boundaries of these districts are levied an additional tax surcharge which covers the additional safety, sanitation and other services within these districts.
The tax rate for the Midtown Community Benefits District (which includes parts of Bolton Hill, Charles North, Madison Park, and Mount Vernon) is $0.132 per $100 of assessed property value. The tax rate for the Charles Village Community Benefits District is $0.12 per $100 of assessed property value.
Property owners will normally receive a Notice of Assessment every three years that shows the old market value as well as the new market value. The new value reflects the market influence and other conditions affecting the property from the time of the last assessment.
The assessment appeal process is intended to assure an accurate property valuation. If you believe that the value placed upon your property is higher than it should be and if you can provide supporting evidence (such as sales information for properties comparable to your own), then it is in your best interest to appeal.
If you decide to appeal upon reassessment of your property, the first step is to reply to the Notice of Assessment by signing and returning the appeal form within 45 days of the date of the notice. If you purchase a property and the property is transferred after January 1 but before July 1, you may file an appeal within 60 days of the transfer.
The Maryland State Department of Assessment and Taxation provides a step-by-step assessment appeal guide on their website.